Tag Archive: EU

EU health tourism and the breakdown of the National Health Service (NHS)

In addition to other issues connected with the EU referendum (e.g. EU immigration, EU benefits tourism and housing crisis and the EU), Britain is currently hotly debating the crisis in the health system or the National Health Service (NHS). It is not unusual for segments of the British media to lead with headlines such as “Migrants are pushing NHS to breaking point,” claiming that the NHS has been left “on its knees” by “uncontrolled migration” from the EU which has merged with the theme of “health tourism” or the practice of travelling abroad in order to receive medical treatment.

Prominent members of the Leave EU campaign, such as Michael Howard and others in the Vote Leave campaign have said: “We will be talking a lot about the NHS in this campaign because we believe that a leave vote is vital if we are to protect the NHS for future generations.” Priti Patel, the Employment Minister, claims that the health service is under threat because of EU membership: “Current levels of migration are causing unsustainable pressures on our public services and we can see that the NHS is creaking under the strain.”

The implication is that EU migration / benefit tourism is at the root of the problems of the NHS. So this post addresses the nature of the UK health crisis and the extent to which it is attributable to the EU migration and health tourism.

Challenges every which way you look

The National Health Service (NHS) is the largest and oldest single-payer healthcare system in the world. It is primarily funded through the general taxation system that is overseen by the Department of Health. The NHS is built upon the principle of comprehensive health service provision based on clinical need, not ability to pay. The NHS provides healthcare to every legal resident of the UK, with most services free at the point of use.

When created after WW-II, the NHS was the pride and joy of the pioneering British welfare state and served as a model for many other countries. But the fact is that the NHS has been in crisis for decades going back to at least the 1980s. As Britons are well aware, wave upon wave of health reforms have sought to cure its ills yet the NHS remains as sick as ever. The starting point in the health debate is to acknowledge that the problems with the health system predate the influx of EU migrants to the UK which started in earnest in earnest 2004 and continues to this day. The NHS’ problems did not begin with EU immigrant and will not end if migration were suddenly to end, regardless of whether migrants originate from the EU (less than half of UK immigration) or elsewhere (Britons returning home, Commonwealth, students, etc. – more than half of the immigration).

The second point is to recognise that the challenges facing the NHS are many and varied, not least connected with an ageing population and the impact of modern diseases such as diabetes, obesity, cancer, etc., combined with escalating costs of procedures, medication and so on.

The health professionals are in the best position to assess the issues and whether those issues are connected with migration or not. In a recent publication “Challenges facing the NHS in England: a guide for MPs and Peers”, the NHS Confederation (representing over 500 NHS organisations that commission and provide health services, including hospitals, community and mental health providers, ambulance trusts and independent sector organisations providing NHS care) set out the main health challenges facing the health system. These are illustrated in the diagram below.

Chart 1 NHS Challenges

Neither immigration in general nor EU immigration specifically figures as a health challenge. There is no reference to NHS creaking / breaking / lack of sustainability due to migratory pressures. This is hardly surprising since all the evidence is that EU immigrants tending to be younger, better educated and in better health than the average Briton in the labour force. We tend to consume disproportionate amounts of health services as babies/children and as pensioners, especially after the age of 75. Young adults – the typical EU migrants – put relatively few pressures on the health system.

Rather, the Call for Action focuses on areas about which there is little controversy among the 500 health professionals in the NHS Confederation. They stress the need for stability if the NHS is to tackle its challenges (endless reforms); the need to increase staff (too few); the necessity for social care funding for people with long-term illnesses; the need to make mental health services available and accessible, etc. The most critical issue by far is the finance challenge; this is the underlying reason for the continuing problems faced by the NHS. The point to note is that the UK is exclusively responsible for the resources that it devotes (or not) to the NHS. No amount of finger-pointing in the general direction of the EU will alter this particular fact.

Furthermore, the NHS funding challenge is nothing new: it predates and supersedes other factors such as EU migration. This is the fundamental reason why the NHS has been gradually overtaken by other countries, as illustrated in comparative research among OECD countries highlighted in the Table below.

Chart 2 OECD health indicators 2015

Health Care Resources in OECD Countries (OECD, 2015)

The UK’s performance compared with OECD countries highlights the NHS’ fall from grace. The UK ranks:

  • 19th in terms of health expenditure per capita;
  • 24th in terms of doctors per capita;
  • 19th in terms of nurses per capita;
  • 26th in terms of hospital beds per capita;
  • 29th in terms of Magnetic Resonance Imaging (MRI) units per capita;
  • 30th in terms of Computer Tomography (CT) scanners per capita.

Some countries, such as Germany, have even higher levels of EU immigration than the UK yet it comfortably outperform the UK in terms of the selected health indicators. Money, or rather the lack of it, is clearly an important reason for why the NHS is in the state that it is.

The UK’s austerity measures, which have been in place since 2009, included severe budget constraints with zero growth in health spending per person in real terms. On a per capita basis and as a share of GDP, health spending in the UK is slightly below the OECD average. Lack of financial capacity is clearly not the issue. Rather the UK government chooses to prioritize other public expenditure, such as defence, over the heath system. Furthermore, the situation is set to deteriorate: the NHS Confederation estimates that the gap between increasing demand for care and the funding available will be at least £30 billion by 2020. The key point is that other economies choose to put more resources into their health systems than Britain. The state of the NHS, by and large, reflects this particular policy prioritisation. Transferring the entire net budget that Britain spent in 2015 on the EU into the NHS, namely £8.5 billion (2014) would not make that much of a difference in the projected NHS deficit of £30 billion in 2020 for England alone. The Vote Leave campaign misleads in suggesting that cancelling one (EU contribution) will solve the problem of the other (NHS crisis).

EU health tourism: where’s the beef?

Health provision is clearly a national issue – the EU has no direct powers in this area except to support the common market. The Government’s audit of EU powers (the so-called balance of competence review) also covered health area and its official report concluded that: “…the UK Government believes that the current balance of competence is broadly appropriate.” It also noted that: “Industry were generally very supportive of the current position regarding competence.” It concluded that: “Evidence suggested that free movement of persons brings benefits for the UK health sector and for patients, but not without risk.”

There are “risks” perceived in some quarters, such as the EU’s Working Time Directive (WTD), which limits work to a maximum 48-hour week and lays down minimum requirements for rest periods and annual leave. But can critics really sustain the argument that the health profession should work longer hours than other professions? Most people would not agree. When it comes to a critical matter of life and death, most people would want a doctor / nurse / surgeon who is neither exhausted nor overworked (we all recall UK health workers, especially junior doctors, having to work absurd and dangerous numbers of hours in the past) when attending to their health needs. The WTD applies to all 28 countries and all professions; I see no reason for making an exception for the UK or for the NHS, though this does not preclude the possibility of fine-tuning the WTD.

There is also freedom of movement of doctors and nurses from across the EU working in the health system in the UK. This is actually a very good thing for the NHS, as acknowledged by the government’s official report: “In terms of health professionals, there has been a very positive impact for the NHS as 10% of NHS staff are from European Economic Area (EEA) countries, without whom there could be staff shortages.” For example, the Royal College of Midwives, has stressed that Britain would be hard-pressed to find enough midwives and nurses trained in the UK to replace the 33,000 from other EU countries who currently work in the NHS.

It is not only an issue of the damage that staff shortages might cause in such a sensitive area as the heath sector. The issue which those interested in improving the health system should be focusing on is exactly why Britain continues to be completely incapable of training a sufficient number of its own health professionals. I recall nurses and midwives being sourced from Ireland before the EU and the rest of the world became the NHS’s recruitment pool for health workers. No open-minded individual can fail to see Britain’s gain in this form of EU migration. If anything, other nations might well criticise the NHS’s beggar-thy-neighbour recruitment strategy (i.e. a policy by which one country attempts to remedy its economic problems by means that tend to worsen the economic problems of other countries) which basically mops-up experienced doctors, nurses, midwives, surgeons, etc. which other countries have paid to educate and train.

There is also the Cross Border Healthcare Directive which allows individuals to purchase health care and treatment from a provider in another Member State. This is supported by the health industry in the UK since it offers them the prospect of widening the sources of income by attracting EU patients and using excess capacity in the health system, for example in specialist areas such as diagnosis and treatment of rare diseases. Furthermore, under the current NHS arrangements, patients in one location of the UK are not free to seek treatment in another part where waiting times/lists may be shorter. However, the Cross Border Healthcare Directive enables them to seek treatment in other EU countries if they wish. This is a good thing: it allows patients to control their own health needs. Something that puts power in people’s hands over vast bureaucracies, for that is exactly what the NHS is, must be a good thing.

EU-related health costs: Britain only recovers 23% of what it could claim back

There is limited reliable data on the use of health services by immigrants and visitors, making robust estimates difficult. That said, the available evidence suggests that use of health services by immigrants and visitors appears to be lower than that of native Britons, as previously discussed, not least because immigrants and visitors are, on average, younger.

In 2014 an official report (Quantitative Assessment of Visitor and Migrant Use of the NHS in England), showed that EU (27 countries) and EEA (3 other countries) visitors and non-permanent residents cost the NHS an estimated £305 million, of which £220m is recoverable by England under the European Health Insurance Card (EHIC) scheme. Every EEA country issues EHIC cards to their citizens, thus enabling them to receive healthcare whilst on a temporary visit to another EEA country on the same basis that is provided to its own residents. People go on holiday in the EU/EEA knowing that if they fall ill or have an accident they will be able to access health care without the need for separate insurance. This saves time, effort and money for all and is widely considered a good thing.

Department of Health data for 2012-13 show that only about £50m was recovered from the EEA countries compared with the £173m that the England pays for British visitors to EEA countries. This means that the NHS / Department of Health are not claiming as much of the money that they are eligible to receive from the EEA countries as they could.

Some forget that this is not a one way street; it is not only EU nationals that come to the UK and use health service here. Britons also make a good deal of use of the health services in other EEA countries and the costs more or less balance out: £220m worth of health services received by EEA people in England, compared with £173m worth of services received by people from England in EEA countries.

The low percentage of recovery (22.7%) is due to one reason and oner reason only: NHS inefficiency, which is an issue for the UK to rectify. Why should Britain need over a decade to set-up a working reciprocal health cost management system when the other 27 nations have long ago managed to do so? It has been argued that there is a lack of knowledge among NHS healthcare professionals as to who is eligible for free treatment. Can this really be so fiendishly complicated as to systematically defeat the British health care system with its new generation of sharp suited, MBA educated management? Surely it is not like expecting the NHS to crack the health equivalent of the Enigma Code.

Rather than voting to Leave the EU for a problem that can only be pinned on Britain itself, it might be more effective to set-up a system to check if an individual is from the EEA and train healthcare professionals to recoup the costs of EU patients, as Britain is fully entitled (but fails systematically) to do.

EU-related health costs: instead of 0.18% of the NHS budget in England, it costs 0.26%

Interestingly but not surprisingly the actual health costs of EEA migrants are very low, despite all the emotive talk of “EU migrants / freedom of movement pushing NHS to breaking point” and “NHS is creaking under the strain of immigrants” emanating from the Vote Leave EU group such as Priti Patel and others. The annual NHS budget in England was worth £116 billion in 2015/6, so EEA migrants used-up 0.26% of the annual NHS budget (£305 million). When the costs that could have been recovered from EEA countries are taken into consideration (on the assumption that the NHS ever gets its act together), the percentage would drop to 0.18% (£220 million). There would appear to be vastly bigger fish to fry when it comes to saving costs in the British health system.

When this analysis is extended from England to the UK, the same health competences report noted that in 2012/13 the UK paid a net £805 million to EEA countries to cover the healthcare costs of Britons, especially pensioners, living in other countries. This sum illustrates just how many UK citizens benefit from the EU health provisions.

The health competences report also stressed that: “… many more UK pensioners choose to live in other EEA countries than pensioners from those EEA countries who live here. Using Spain as an example, approximately 400,000 British pensioners reside there at any one time. For a great majority of these, the fact that the UK covers their healthcare is of great benefit. It should also be noted that, had those citizens remained in this country, the UK would be meeting the costs of their NHS care in the usual way and in some Member States the average cost of healthcare can be lower.”

In other words not only do more British pensioners benefit from the system than EU pensioners gain from using the NHS but it would cost the NHS more to provide health care to those 400,000 Britons currently living in Spain (and potentially many others, since there were about 1.4 million Britons living in the EU) if they came back. The Vote Leave EU campaign would find it hard to swallow the point that EU health provisions may actually be saving British taxpayers money (and/or that the savings are being recycled for the benefit of the health of the people in Britain).

It should be noted that the NHS (Charges to Overseas Visitors) Regulations Act of 2015 requires hospitals to charge overseas visitors (not ordinarily resident) for the NHS services that they provide in a hospital or provided outside by staff employed by a hospital. GP services and services provided outside hospitals are not chargeable. So it would appear that Britain is well on the way to meeting the public concerns about the costs of health for visitors, whether from the EU or elsewhere.

EU health tourism: much ado about very little

The UK’s competences review concluded that, on balance, the EU’s engagement in the health sphere is appropriate and noted the major advantages of EU health directives, including the IHIC card, the number of EU educated nurses and doctors working in the UK and the capacity to access European level health services. There are real benefits for health institutions and citizens across EU countries.

In terms of the major health challenges facing the UK in the future, the 500 NHS Consortium health institutions did not identify immigrants as an issue: money or rather the lack of it is the key issue in Britain. The evidence is that EU/EEA citizens use the NHS intensively less than native Britons. In any case, Britons make extensive of health services in EEA countries, especially those that retire in Spain, France and elsewhere.

The EU introduced health transfer arrangements to ensure that each EEA nation pays according to the health services absorbed by their nationals. This is fair but it is up to each country to introduce the necessary systems and procedures. After a decade, the NHS is still unable of charge its share, which means that instead of EU nationals costing the NHS 0.18% of its annual budget, it actually costs 0.26% in England.

Boris Johnson, Michael Gove and other Vote Leave campaigners may insist that the “billions spent on the UK’s EU budget contribution to be spent on the NHS.” That is fair enough but let us not pretend that this will solve the problems in the health system at a stroke. Even if the GBP 8.5 billion net EU contribution were poured in its entirety into the NHS tomorrow, nothing would change fundamentally because the financial need is much greater than this contribution. Can it realistically be argued that EU migration / health tourism is pushing the NHS to breaking point, especially when large numbers of Britons and British pensioners living in the EU are actually reducing the costs to the NHS since the costs of health provision in Spain and elsewhere are lower than they would have been in the UK?

I don’t think this is such a bad health deal for Britain and is not a sufficient reason for voting to leave the EU in the forthcoming referendum.

  • Is the EU responsible for the state of British health system: the EU ensures that all EU citizens have access to health services in all countries at no extra cost or hassle.
  • Is the British government responsible for the state of British heath system: the UK is 100% responsible for national health provision and the health budget. The UK chooses to invest a smaller amount on health than other countries and this is the root cause of the health problems. Pumping Britain’s entire EU annual contribution in the NHS will not change the fundamentals of the health system, though it would certainly be helpful.
  • Should I vote to leave the EU because of EU health tourism: EU nationals make less use of the NHS than do native Britons. Also, there are more retired Britons living in EU countries and making use of other EU health systems than there are EU nationals living in the UK. Both save the NHS money and/or allow resources to be focused on health services in Britain.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


The British housing crisis: is EU migration also responsible?

Let us get down to brass tacks: Britain has a serious housing crisis. When demand for housing (people wanting to rent or buy) exceeds supply (the stock of housing) the effects are not good for society. House prices and rents rise, making it difficult for people to pay for their accommodation. This reduces the net income available for other things, makes people anxious and directly affects their quality of life.

If people migrate to the UK or wealthy foreigners invest in the housing market, this reduces the housing supply for the domestic population unless construction goes up. This drives-up house prices and the levels of frustration, especially when people have to share their homes with their parents/children, are priced out of living in their communities or see empty houses that are investments, rather than homes. This is especially so in Britain, a nation of home owners and this state of affairs leads some to conclude that the housing crisis is caused by the EU and its freedom of movement principle. It leads to a perception that perhaps EU mobility results in a lack of housing for the native population. This is powerful argument during the period leading up to the EU referendum in June 2016; it connects with the EU immigration and EU benefit tourism, topics I have previously written about, and is presented as another reason for Britons to vote to Leave the EU (i.e. Brexit). So it is important to address the nature of the British housing crisis and the EU’s role in it.

The first thing to be said is that there is no shortage of analysis of either the housing problems or the possible solutions, but the latter basically boil down to balancing housing demand and supply, together with the political will to solve the crisis.

My home is my castle: demand for housing

Numerous factors influence housing demand. A critical factor is price: at higher prices, real incomes fall and people will reduce their demand while alternatives to owning a property, such as renting, become more attractive. There is a multitude of other factors that are important, such as population dynamics (population size, migration, birth and death rates, age structure, etc.), incomes of households (some may shift from renting to buying, move to a bigger property, buy a second property, a holiday home, etc.), social and lifestyle trends (e.g. late marriages, divorce rates, decisions to remain single, etc. all increase single households and thus demand), availability of credit and interest rates (higher rates make ownership less affordable while lower ones achieve the opposite and restriction in the supply of credit reduces demand for housing and can lead to a fall in house prices) and other influences such as government incentives (to buy, to rent or to buy to rent) and expectations in terms of house /land price developments (speculation).

Since all the above influence housing demand, estimating future demand is a complex process. What is simple though is that immigration, whether from the EU or elsewhere, is only one factor among many others, the majority of which are more influential in terms of stimulating demand for housing in the UK.

Nevertheless, as far as the EU’s freedom of movement of people is concerned, there are two further issues to consider:

  • EU migrants are a sub-set of the migrants to the UK. In a separate post, I showed that of the 498,040 people who migrated to Britain in 2012, 80,196 or 16.1% were Brits returning home, 157,554 (31.6%) were from the EU and 260,290 (52.2%) were from the Commonwealth and other countries that Britain is entirely responsible for, rather than the EU;
  • EU migration is not a one way street and not all roads lead to London and the South East. In the same year, 321,000 people left the UK, a proportion of which migrated to other countries in the EU.

Consequently, even if EU migration was the only issue affecting demand for housing, which is clearly far from being the case, EU migrants do not constitute the majority of immigrants to the UK. Furthermore, the same process is happening in other EU countries that receive Britons.

A number of housing demand studies demonstrate the same trend in the UK: housing demand is increasing significantly and the government and the rest of the housing system, not least the planning system and the construction industry, need to respond in order to ensure that the supply covers the future demand. After all, it is not unusual for populations to increase and housing policy and system must respond in order to deliver affordable, quality housing. The public has the right to expect this irrespective of the particular set of factors that may drive housing demand (i.e. whether immigration is an issue or indeed whether it is from the EU or elsewhere) at a particular point in time.

A comprehensive estimate of housing need and demand in England was published by the Town and Country Planning Association. It estimated that England alone required 240,000 – 245,000 additional homes each year until 2031 in order to meet rising demand. Many similar projections have been made long before EU migration to the UK became an issue of debate post-2007.

Housing supply: decades of neglect = housing crisis

The issue then is how much housing is being built and is it sufficient to meet the demand for 245,000 new units per annum? The UK housing construction data (supply) are presented in the Table below.

Table 1 UK Housing Construction

Source: Gov.uk, Live tables on house building, Table 209

A few points are worth noting based on the Table:

  • Housing construction (permanent dwellings completed) in England have fluctuated between a peak of 170,610 in 2007/8 and 108,870 in 2011/11;
  • The point during which it was perceived that there was an acute housing crisis was around 2005 but since then, the trend in terms of housing supply, albeit fluctuating slightly, has actually been downwards;
  • By definition if the target for England is 245,000 new units per annum, the equivalent for the UK will be much higher. The last year of housing construction data (2014-5) shows a gap of 93,000 even against the lower target for England;
  • In a well-functioning housing market where the citizens, planning authorities, construction industry and the government jointly perceive a housing crisis, the normal response would be for housing supply to increase to reach the target of 245,000 new housing units per annum for England. If this does not happen, it adds to the affordability pressures experienced;
  • If here is such a systematic lack of construction, then surely the respective people in charge of housing policy, finance, planning, construction, etc. are responsible.

To Scapegoat or not to scapegoat (or holding a mirror to British policy makers)

A considerate British voter in the forthcoming EU referendum might reflect on the following issues:

  • The EU has no control in the housing sphere: this is exclusively the remit of national governments, in this case successive UK governments;
  • There are many factors affecting demand for housing, of which EU migration is only a secondary factor;
  • The EU related migration accounted for 31.6% of the migrants to the UK in 2012, but the UK also sent its migrants to EU countries – the EU freedom of movement cuts both ways;
  • The UK has systematically produced fewer housing units than it needs for a period of decades despite projections of massive unmet demand for housing ;
  • The UK, including its politicians, its construction industry and its planning system (local authorities) are responsible for ensuring that supply keeps-up with demand and that housing is affordable. This requires responding to changes in housing circumstances, regardless of what is driving them (e.g. prices, birth rates, speculation, constrained land release, immigration, interest rates, tax incentives, etc.);
  • Despite mounting pressure, regular public outcries, evidence of shortage and affordability problems, etc., the UK only managed to build a paltry 150,000 housing units in 2014-5. This is a damning indictment of Britain, not least its politicians, policy-makers and industry.

It is up to each individual to form their own opinion of where the blame for Britain’s chronic housing crisis should rest. Scapegoating EU migration (which took off from 2004) for problems which have been systematically neglected in the UK amounts to a disgraceful attempt to blame others for issues which Britons have failed to tackle over and over again and are still doing a miserably bad job with.

In this context, it is worth addressing two issues which policy-makers, politicians and the Leave the EU campaign will almost certainly raise in defence of the indefensible: the lack of adequate and affordable housing in the UK, which is a basic human right.

Clutching at straws 1: the crowded island myth

Many, if not most, Britons appear to be convinced that the UK is a very crowded island and that there is simply no space left for housing construction, let alone to accommodate migrants from the EU or anyone else. Certain segments of the media that are biased against the EU, as well as the general Leave campaign, including populist political parties, are keen to emphasize this argument, so let us examine the claim.

The most comprehensive analysis of this issue (UK National Ecosystem Assessment) concluded that only 6.8% of the total land area of the UK is urban (10.6% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales). But being urban does not necessarily mean that it is built upon since such areas also contain gardens, lakes, etc. The most detailed analysis ever conducted found that only 2.3% of England is built upon, the rest is natural. Elsewhere in the UK, the figure is less than 1%. Contrary to popular misconception, only a tiny fraction of Britain has been concreted over. Britain is not a crowded island. It can and must build more housing for the benefit of its citizens.

Clutching at straws 2: EU preferential treatment in accessing social housing myth

Another common perception is that EU citizens are benefit tourists, and that they strain the welfare state by having a higher demand for social housing. But the data show that about 17% of UK-born and 18% of foreign-born individuals live in social housing. That means that foreigners are on par with native Britons when it comes to access to social housing. However, when it comes specifically to EU migrants, the popular perception is even more incorrect. Studies demonstrate that citizens of EU-8 countries who arrived in the UK after accession are 57% less likely to live in social housing than native residents. More recent studies indicate that over 90% of immigrants in the UK are in households that are eligible to apply for social housing (p.3) and confirm that EU (and EEA) citizens are less likely to be in social housing than Britons.  The research also shows that, once factors like the demographic structure, location and economic circumstances are taken into consideration, immigrant households are significantly less likely to be in social housing than equivalent native households. Another popular myth bites the dust.

Build, Build, Build

The housing crisis is fundamentally a matter of demand and supply and the policy choices each country makes about how to prioritize public investment and other policy decisions. For decades Britain has emphasized home ownership as the one and only housing policy priority. It has constrained social housing construction for ideological and financial reasons, while at the same time forcing social housing to be sold at discount. Its recent policies have stimulated a boom in buy-to-rent, which has increased private renting but also boosted house prices and exacerbated the affordability problem.  At the same time, policy makers have not stimulated the planning system to release sufficient land for housing construction, mainly due to the NIMBY (Not In My Back Yard) syndrome. In the meant time, the construction industry has shown much more readiness to speculate in order to accumulate, rather than increase construction efficiency, productivity and quality. None of this has stimulated housing supply greatly while housing affordability has declined.

Housing is a matter for each of the 28 nation states of the EU. Some countries, like Germany, build enough housing to meet the needs of their citizens whose quality of life is significantly improved by having sufficient, high quality, affordable homes to rent and/or buy (the recent refugee crisis could not have been planned for in advance. By definition, a surge of 1.1 million asylum seekers in 2015 was not part of the housing forecast). Others, like Britain, do not build enough housing. This is not because of insufficient land, EU freedom of movement of people or other handy excuses for systemic failures on the part of British politicians and their policies, the British planning system and the British construction industry. Any such interpretation amounts to the politics of scapegoating others for one’s own glaring failures and I, for one, will have no truck with it.

  • Is the EU responsible for the British housing crisis: The British housing crisis has been decades in the making. Strong EU immigration is a relatively recent phenomenon.
  • Is the British government responsible for the state of British housing: Its policies have focused almost entirely on housing ownership (tenure), rather than housing construction.
  • Should I vote to leave the EU because of the state of British housing: Britain alone is responsible for regulating demand and supply to deliver sufficient and affordable housing.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


How extensive is EU benefit tourism in the UK anyway?

A cursory reading of Britain’s most popular newspapers might leave the distinct impression that immigrants, especially from the European Union (EU), are beating a path to the UK specifically in order to take-up welfare benefits, live in social housing, avail themselves of the health system and generally live the high life on the back of the hard-working citizens of the UK (i.e. benefit tourism) who actually pay taxes and thus subsidise the lives of such EU citizens.

 Immigration generally is “the” issue of the forthcoming EU referendum and if the above characterisation of the situation remotely reflects the truth, I would be campaigning to leave the EU too. Not surprisingly this is one of the key arguments of Eurosceptics and Brexiteers in the debate over the future of the UK in the EU. So this post examines the extent to which the EU freedom of movement of people contributes to benefit tourism in the UK. 

EU migrants sponging off Britons?

There are four fundamental freedoms in the EU which are designed to create a common market in Europe, namely to: sell goods, sell services, invest and work anywhere in the EU. Britons have no issues with the first three freedoms but remain deeply concerned about the fourth. 

The first point to note, as discussed in the previous post on EU immigration, is that the freedom of movement of people is not possible for seven years upon joining the EU, unless a nation chooses to opt-out as the UK did (together with Ireland and Sweden) in 2004. So, for example, the Croats will not be able to work in the UK until 2020 unless a country, such as Germany, decides otherwise. This is to ensure that there is not a rush out of a country that joins the EU. The second point to note is that out of the 508 million people in the EU, only 2.2% of them chose to live in another country of the EU. There is clearly no mass exodus of people from one EU country to another. The third point is that though the UK is indeed a very attractive country to move to, it by no means the only one or even the main one in the EU.

In terms of net migration (those arriving minus those leaving), the countries with the largest net inflows of foreign nationals were Germany (452,000), UK (267,000), Italy (235,000) and France (71,000) in 2013. The reality is that the more economically dynamic a country is, the more it is likely to attract people looking for work or to improve their lives.

Turning specifically to the issue of benefit tourism, the evident suggests that EU citizens come to the UK to study, work or to join their families, rather than because of the allure of the UK’s social benefits. This is illustrated in the graphic below, which shows that family reunion used to be the dominant entry route. Student inflows became the main reason for entry, but this has fallen significantly in recent years, something which is connected with the Conservative government’s drive to cap net migration at 100,000 per annum. Most immigration from the EU is for work-related reasons, whereas most immigration from outside the EU is for study-related reasons.

Figure 1: Annual Inflows of Migrants by Reason

Figure 1 Annual Inflow of Migrants by Reason

 

 

 

 

 

 

 

 

 

 

Source: Immigration and the UK Labour Market, Jonathan Wadsworth, CEP, 2015

Furthermore, the same study shows that immigrants are better educated than their UK-born counterparts and that the educational gap is actually increasing over time over time. The “old” Europe or EU-15 migrants are twice as likely to be graduates and the “new” Europe or EU-8 migrants (the 8 Central and East European countries that joined the EU in 2004) are also more likely to be graduates than the UK-born, and most others have intermediate levels of education.

The conclusion of the research is unequivocal:

“There is still no evidence of an overall negative impact of immigration on jobs, wages, housing or the crowding out of public services. Any negative impacts on wages of less skilled groups are small. One of the largest impacts of immigration seems to be on public perception.” (2015, p.1).

But even if there is little or no evidence that EU immigrants to the UK reduce jobs and wages, housing or other public services (housing and health services are discussed in subsequent chapters), this cuts little ice with the Leave campaigners. They maintain the “benefit tourism” rhetoric in relation to EU migration, stressing that an unspecified proportion of EU migrants come to Britain specifically to take advantage of its generous welfare state.

To be fair, such belief is not unique to Britain. In Germany, similar pronouncements are regularly made by the CDU/CSU, the mainstream right of centre parties, as well as the Alternative für Deutschland (AfD), a fast growing populist party. The AfD is the equivalent of UKIP. It wants to leave the Euro, rather than the EU, while also stopping benefit tourism and the flow of refugees to Germany. Both parties are aided and abetted by segments of the media in driving a general notion that EU benefit tourism is pervasive, unfair and must be stopped forthwith.

What exactly is the scale of EU benefit tourism?

A detailed report (ICF GHK and Milieu Ltd, 2013) concluded that non-active EU migrants represent a very small share (0.7% – 1.0%) of the total population in EU Member States. The evidence is that non-contributory benefit payments to immigrants account for between 1% – 5% of all benefits paid in France, Sweden, the Netherlands, etc. and above 5% in Belgium and Ireland. However, the share of non-active EU migrants is very small, both in the UK (1.2%) and in Germany (1.1%).

Other research examining recent EU immigrants to the UK of working age who are not students, not in employment and not in receipt of state benefit, estimates that this group amounted to 39,000 people received any benefit, including child benefit. To put this in perspective, this is only 1% of all recent EU nationals in the UK who are of working age, not students, not in employment but in receipt of some kind of state benefit. Since non-EU immigrants typically cannot access benefits until they have been resident in the UK for five years, it is unlikely that they would migrate with the intention of accessing state benefits.

The latest official government information (February 2015) reinforces the previously mentioned studies:

  • 371,220 working-age claimants of UK benefits (7.2% of total claimants) were non-UK nationals. Of these 113,960 were EU nationals, representing 30.7% of non-UK claimants and only 2.2% of all claimants;
  • In terms of the people who are out of work and claiming benefits, 287,300 were non-UK nationals claiming out-of-work benefits or 7.4% of total claimants. Of these 91,700 or 2.4% of total claimants were EU nationals;
  • People born outside the UK comprised 16.2% of the working-age population but only 7.7% of working-age individuals receiving key out-of-work benefits were non-UK nationals;
  • 19,579 families had Child Benefit awarded for 32,408 children living in EEA states, around two-thirds of whom were in Poland. 7,026 families had Child Tax Credit granted in respect of 11,762 children in EEA member states.

The Government’s own authoritative Balances of Competences review on the Single Market Free Movement of Persons (2014, paragraph 2.55) observed that:

“… none of the evidence we received was able to point to specific research or analysis on the importance of access to social security benefits in the decision to migrate.”

Whatever the Leave EU faction and segments of the media may claim, EU benefit tourism, to the extent that it exists, is much lower than the native population’s own use of such benefits. This reinforces the point that EU nationals come to the UK to work, not to sponge off Britons. Benefit tourism is not worth getting worked-up about, unless it is for cynical political reasons.

A storm in an English tea-cup

People generally emigrate due to the prospect of employment and better wages, rather because of the lure of welfare benefits. The EU migrant population is younger and better educated than the average Briton; the unemployment rate among EU migrants is also lower than that of the average Briton. When the figures for both non-EU and EU migrants are analysed, it is hard to avoid the conclusion that the benefits tourism hysteria affects very people from the EU living in the UK. This is a storm in a tea-cup whipped-up by those that seek to pander to popular misconceptions rather than standing-up to them.

Benefit tourism, whether from the EU or elsewhere is largely a myth. It is not only that not many migrants are eligible to get benefits in the UK. It is that the great majority of EU migrants actually pay more than their share and take very little out in the form of benefits of any sort. EU migration is good for the tax man and for the welfare state in Britain.

  • Is the EU responsible for the level of benefit tourism in the UK: No. It only guarantees freedom of movement and equal treatment of all EU nationals.
  • Is the British government responsible for benefits eligibility in the UK: Yes. For UK and non-EU nationals; partly for EU nationals, but the recent renegotiation has resulted in a decision to tighten-up eligibility rules for EU nationals living in Britain.
  • Should I vote to leave the EU because of EU benefit tourism: No. The numbers of people involved are small and proportionately much lower than the native British population claiming benefits.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


Is EU immigation so negative for the UK and is it out of control?

EU immigration has been possibly the single most topical issue in Britain since 2004, when Britain allowed various new members of the European Union (EU) such as Poland to come and live and work in the UK. When the economic and financial crises hit, the views on immigration hardened noticeably in Britain, with an accent on immigration from central European countries. The discourse evolved into “British Jobs for British Workers” under the Labour Party. Under the Conservative Party, the debate intensified further, partly due to the impact of the UK Independence Party (UKIP), resulting in a “cap” on annual net immigration at 100,000 and concern over Britain’s “uncontrolled borders” due to the EU’s freedom of movement of people. Attention then shifted to Bulgarian and Romanian migrants and EU “benefit tourism.” Lately, the surge of refugees and asylum seekers to the EU in 2015, on-going tensions in the “jungle camp” in Calais and the possibility of jihadist terrorist sneaking through EU borders have elevated anxiety to peak levels.

This is a very potent mix of issues to discuss. In the context of the British referendum on whether to remain in the EU or not, the key issue boils down to this question: to what extent is the EU and its freedom of movement of people the reason for the current level of immigration in the UK and it is good or not for Britain??

Is the level of foreign born population much higher than the EU average?

The first issue to address is whether Britain is somehow exceptional and has disproportionately higher levels of foreign born population living in the country. The answer is an unequivocal no. The UK and Germany had very similar levels of foreign-born inhabitants (12.3% and 12.4% respectively) as a percentage of the overall population in 2013. The latest figures would probably be around 14% for the UK but larger for Germany, following the entry of over 1 million refugees in 2015, an issue which I have written about.

The percentage of foreign-born populations in the UK is relatively modest compared with many EU countries such as Luxemburg (42.4%) and Cyprus (23.2%), well as others such as Belgium (15.7%), Ireland (16%), Austria (16.1%), Sweden (15.4%), etc. Indeed, given Britain’s not so distant colonial past, the level of foreign born population in the UK could have been a lot higher. At the same time, it is not only foreigners that have been beating a path to the UK. Historically speaking, a very large number of Britons emigrated to the rest of the world, especially the Commonwealth countries, though there is far less concern about British emigration as about immigration into the UK.

Focusing on the role of the EU migration and thus on the freedom of movement of people, the EU cannot be held responsible for any migration to Britain prior to joining the European Economic Community (EEC) in 1973. Until then, Britain was entirely in charge of its immigration policies and the pattern of immigration reflected its colonial past and the rules established by successive British administrations.

The freedom of movement of people is one of the four economic freedoms that form the basis of the EU: free movement of goods, services, labour and capital. By voting in a referendum in 1975 to join what is now the EU, the British people accepted these four economic freedoms. The freedom of movement and residence for persons in the EU as one of the cornerstones of the EU was established by the Treaty of Maastricht in 1992 but the data show that the flow of EU citizens to the UK was a trickle until 2004, when larger numbers started to come to the UK.

Are Britain’s Borders out of control because of the EU?

Over time, the EU has grown to 28 member countries, a process that successive British governments have supported enthusiastically until recently. There is always a possibility that people will flow from lower income/employment economies to higher income/employment ones. This is the very reason why EU transitional provisions exist to restrict the flow of people from new member countries to the rest of the EU for a period of up to 7 years. This applied to Spain, Portugal, Ireland, etc. when they joined to the EU then Poland, Slovakia, etc. then Bulgaria and Romania (until 01 January 2014) and it applies to Croatia, the latest country to join the EU, until 2020. Each member country has a choice of either sticking with the 7 year transition or not. Thereafter the EU freedom of movement of people and workers applies in full to the new EU member countries.

The evidence shows that there was not a significant flow of people from the EU to the UK until 2004. Until that point the overwhelming majority of immigration to the UK reflected the policy of the British government, which in turn reflected Britain’s colonial heritage and its agreements with Commonwealth countries, as well as a strong flow of students to the country. These are not something which the EU interferes with. They are national decisions that Britain makes.

Furthermore, two issues reinforced the UK’s ability to influence migratory flows to the UK:

  • Schengen Agreement: this created the EU’s borderless space, enabling passport-free movement across most of the EU bloc. However, the UK opted out of the Schengen Agreement and unlike most EU countries, its borders remain intact and passports are essential to gain entry;
  • Britain is an island: unlike most other EU countries which have no internal borders and thus people can cross former borders unimpeded (this is changing following the 2015 refugee crisis), this is not the case in the UK. As an island, it has defensible natural and other borders. There are few entry points and every person seeking entry is checked by the UK authorities.

Therefore, the notion often repeated by the media and “Leave” politicians that Britain has “uncontrolled borders” because of the EU and its freedom of movement of people is little more than a fib. It has opted out of Schengen, it has natural borders and migrants can only come in via three routes: the Channel tunnel, the harbours and the airports, all of which under the exclusive control of the UK Border Force. It is only the people that are allowed in (or manage to sneak in) that get through.  This is the exclusive preserve of the British government. What it cannot hinder is the freedom of movement of EU citizens (once the transition period is over). However, this cuts both ways: Britons can and do leave the EU to other EU countries in large numbers.

If Britain is an island and is able to check every single passport of every single person coming into the country, you might well pause to ask what is so uncontrollable about the UK’s borders, other than EU related migration? Whose fault is that and is the EU element a reason to leave the EU?

Why did EU migration increase and is it detrimental to Britons?

The UK government (and Ireland and Sweden) chose to forego the EU transition arrangements and opted to remove the restrictions on labour market access from the onset of the EU enlargement in 2004. Other nations gradually followed suit, but like the UK, did not have to for 7 years. Germany and Austria restricted labour market access to the maximum period allowed.

EU-8 is the term used to denote the 10 countries that joined the EU in 2004 (Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovenia, Slovakia), excluding Cyprus and Malta. The UK decided of its own volition and with its national interests in mind, to allow the citizens of the EU-8 countries to live and work in Britain immediately. The rationale at the time was clear: Britain’s economy was booming and both the government and the private sector were concerned about a possible overheating labour market. The problem was solved by suspending the EU’s 7 year rule. Citizens from the EU-8 responded to the invitation to come to the UK, exactly as hoped by British authorities and industry. The key issue, however, was that neither foresaw just how many would choose to take-up the offer to come and work in the UK and Ireland.

But this was not an issue as the economy kept growing and all boats kept rising with the tide of employment and wealth being generated. British companies, British tax payers and British citizens benefited from the contribution of a young, healthy, educated, willing and industrious new source of labour.  When the double-whammy of deep recession and financial crisis hit, leading to unemployment and reductions in wages, the gear was thrown into reverse. History has a habit of repeating itself. The call for “British Jobs for British Workers!” was soon be heard, as well as increasing levels of criticism of Central European migrants, which then transmuted into criticism of the EU, the freedom of movement of people, Britain’s uncontrolled borders, etc. This was followed swiftly by the rise of UKIP as a political force, leading to a decision by the Conservative Party to cap net immigration at 100,000 per annum and culminating in the decision to hold a referendum on whether to remain in the EU or not on 23 June 2016.

The hardening of public attitudes in respect to EU immigration specifically since 2008/9 only makes sense if the EU migrants, and more especially the recent arrivals from the EU-8 countries, have been taking-up jobs which the British population would have otherwise have had, thus leading to higher levels of unemployment among the native population, as well as depressing their wages.

The evidence is that there are two types of EU migrant: those from “old” Europe (EU-15 such as France, Germany and Italy) who are slightly younger and more highly educated than the average Brit and those from “new” Europe (EU-8) who are much younger and also better educated than the average Briton. The old Europe migrants tend to find more highly skilled work than the average Briton. However, the new Europe migrants, partly because of the lack of language skills, found work mainly in low-skill, low-paid jobs such as skilled trades, construction and services jobs.

The evidence is that neither the “old” nor the “new” EU migrants put pressure on the wage and job prospects of the native British population. A review of various UK studies shows that there has been no, a small negative or a small positive labour market effect (wages, unemployment, etc.) in destination countries such as UK, while the long run impact is thought to be very small or none. By contrast, “old” EU migration has resulted in an increase in human capital, leading to higher productivity while also having a positive effect on British GDP.

The consistent conclusion from research into the labour market effects is that migration from the EU has been beneficial to the UK economy.

Is the EU freedom of movement a one way street?

It might be quite hard for some to comprehend this, but not all roads lead to London and the south east. The EU’s freedom of movement of people (as well as goods, services, capital) is a remarkable gift: it allows all EU citizens to travel across 28 countries (31 when Switzerland, Luxemburg and Lichtenstein are counted) to study, work, retire, au pair or just enjoy the richness of Europe whenever and as often as they like without “let or hindrance”, something which Britons should appreciate since these very words are engraved in our passports.

Many, if not most Britons, enjoy some or all of these freedoms in one way or another, not least in terms of their holidays. Indeed, 2.2 million Britons, such as me, have chosen to work, study, invest (e.g. holiday and retirement homes and pension funds) or retire in EU countries not least Spain (just over 1 million), France (330,000), Ireland (329,000), Germany (107,000), Cyprus (65,000), the Netherlands (48,000), Greece (45,000), Portugal (39,000) and Italy (37,000). It is not possible to claim anything other than that the UK and its citizens have taken full advantage of the freedom of movement of people in the EU: the numbers of Britons living in the EU almost balances the EU citizens living in the UK (2.3 million). Despite the somewhat hypocritical stance of many Britons towards the EU freedom of movement of people, this right is something which is taken for granted by a very large number of them, especially the elites that control the British media and the political parties (it would be good to know just how many of them own a holiday home and/or how frequently they holiday in the rest of the EU). Leaving the EU would be a double-edged sword for Britain.

Is the level of EU migration to the UK unstoppable?

Chart 1 Migration 1991 - 2014

 

 

 

 

 

 

 

 

 

 

Source: Migration Statistics, House of Commons Library, Briefing Paper, 2015

Chart 1 shows immigration, emigration and net migration in the UK. During 1991 – 2014 immigration increased rapidly from 329,000 to 632,000. Emigration also increased from 285,000 to 319,000. Net migration (those arriving minus those leaving), increased from an annual average of 37,000 during 1991 – 1995 to an annual average of 232,000 during 2010 – 2014; this represented a significant and sustained increase in the level of migration.

However, the majority of immigration is not from EU countries, as the Table illustrates for 2014.

Table 1 Immigration 2014

Source: Migration Statistics, House of Commons Library, Briefing Paper, 2015

Historically, EU migration to the UK has been relatively low: during the period before the British government chose to allow EU-8 countries to enter Britain in advance of the 7 year transition period, EU migration accounted for 12.9% of all migration.

By 2014, 41.8% of annual immigration was attributable to the EU’s freedom of movement of people. However, the majority of migrants to the UK remain Brits returning home (12.8%) or non-EU nationals (45.4%). The decision by the UK to allow close to 60% of migrants to enter is not to do with the EU in any way, shape or form.

Of the 41.8% of the EU nationals entering the UK in 2014, almost half (20.4%) were from the EU-15 or “old” Europe such as Germany, Italy and France. As previously discussed, these are typically extremely well-educated, professional individuals who the British economy relies on to succeed and thrive. 12.7% of EU migrants were from the EU-8 such as Poland and Slovakia. The rest, 8.7% are from the rest of the EU, which is mostly Romania and Bulgaria. These are less well educated but still outperform the British average.

On this basis, although EU migration to the UK is undoubtedly significant, it is beneficial to the economy and only 21.4% of overall migration is from countries that Britons have become sensitive to in recent years. The UK could reduce the levels of migration from non-EU countries (45.4%) overnight, if it chose to do so, without reference to the EU or anyone else. Presumably it prefers not to hinder Britons from returning home, students paying pretty good money into the British higher education system or close-off access by Commonwealth countries (or presumably cut-off the supply of highly skilled employees from “old” Europe).

The rest (from the EU-8 and EU-2) amounts to 21.4% of the immigration experienced in 2014 or about 1 in five of the migrants entering the country. Is this worth leaving the EU in order to stop this group from the EU entering the country? And is it worth doing so despite the evidence that such migration does not depress wages and does not reduce the employment prospects of native Britons? I don’t think so, despite the media negativity and the claims of UKIP and Leave faction.

However, it might possibly be worth it if the EU citizens, whether from old or new Europe, were in the UK specifically to take-up the social benefits, rather than coming to work and thus contribute to the British economy. I shall address the issue of EU “benefit tourism” in the next post.

The EU immigration debate – much heat, little light

Migration from the EU was relatively low until 2004 when the UK decided, in its own interest, to allow immigration from the EU-8 accession countries such as Poland a full 7 years before the EU transition period officially required it. The UK benefited greatly from this decision, as did the many migrants that responded to the UK’s invitation: they did not come illegally to Britain. When the economic and financial crises struck, the mood turn ugly in the UK towards migrants generally, and those from the EU specifically. The freedom of movement of people is routinely criticised but the facts are that Britain has opted out of the Schengen Agreement, is an island and is in full charge of policing its own borders and deciding who comes into the country, not the EU. The latest information shows that immigration is running high but 12.8% are either Britons returning home or non-EU nationals (45.4%), mostly from the Commonwealth countries, over which the UK has full control of but rightly, chooses not to stop.

This means that less than half (41.8%) of the UK immigration originates from the EU. But even here, the situation is not as simple as UKIP and the Leave campaign pretend. Almost half (20.4%) are from the “old” Europe comprising top professionals which the British economy depends upon. Only 12.7% are from the EU-8 such as Poland and Slovakia and 8.7% are from EU-2, namely Romania and Bulgaria. However, in both cases, the evidence is that they are neither reducing the wages nor the employment prospects of native Britons.

Furthermore 2.2 million Britons benefit from the EU freedom of movement of people compared with 2.3 million EU citizens living in the UK. A decision to leave the EU would be a double edged sword for Britain, since it not only benefits economically from EU immigration, but also exports pensioners, student and workers to other parts of the EU.

Is this a case of the British media and populists politicians eating the EU cake and having it too? Form your own opinion.

  • Is the EU responsible for the overall level of foreign born population in the UK: No
  • Is the British government responsible for its own borders and the majority of migration in the UK: Yes
  • Should I vote to leave the EU because of the EU freedom of movement: No

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


In Praise of Freedom of Movement of People in the European Union

MoveMapper™ helps you move to another country quickly and painlessly

MoveMapper Android App

In these days of mass movements of people connected with the refugee crisis, it is rare to find recognition of the European Union’s (EU) freedom of movement of people, let alone any commendations. Rather, the media and politicians tend to focus on the stresses and strains connected with migration and freedom of movement within the EU in general and the volume of refugees heading to Europe specifically. In this article, I argue against the grain of current discourse, fully acknowledging populists’ ability to set the tone of public opinion. I make the argument that the single most important achievement of the EU is the principle of freedom of movement of people across 28 countries. This fundamental right is under attack from many quarters. This article and the MoveMapper™ app presented below, represent my effort to counteract this trend. Freedom of movement of people has the capacity to improve people’s lives, while also raising standards of living for all. We should not allow it to be undermined by short-sighted, populist agendas.

The Nation State: freedom of movement lost

Before there were dukedoms, fiefdoms, principalities and eventually nation-states, human being roamed the earth and settled where they chose to. Freedom of movement of people existed in its purest sense: we could go anywhere we liked and the world was our oyster. After the establishment the nation state we became Germans, Britons and so on. Fences, borders, visas and other obstacles restricted the ability to live and work severely and the arena of life was telescoped into national boundaries except for a lucky few, such as diplomats, the military and the well-to-do.

The EU: freedom of movement regained

At the heart of the European Union (EU) is the establishment of a common market. This in turn required overcoming a number of restrictions and led directly to the establishment of the four fundamental freedoms at the core of the EU:

  • The free movement of goods: this right allows free flow of products between EU countries free of import/export duties/charges and common customs tariffs for non-EU countries;
  • The free movement of services (and of establishment): this ensures unrestricted rights to create firms/self-employment in any country and freedom to provide cross-border services;
  • The free movement of capital: this allows capital flows (finance, property, etc.) within the EU countries;
  • The free movement of people: this allows the relocation of citizens between EU 28 countries to pursue their activities, including the abolition of discrimination based on nationality.

The EU is dedicated to realising these four freedoms, subject to exceptions where a Member State can prove that they jeopardize a public good (e.g. public health) and are safeguarded by EU Treaty. Of the four freedoms, the most important to the 500+ million people living in the EU, is the freedom of movement of people throughout 28 countries (actually 32 in the European Economic Area countries, which includes Switzerland, Iceland, Liechtenstein and Norway).

Up-Close: Movement of People

For me, this is the most fundamental freedom and greatest achievement of the EU. It guarantees every EU/EEA citizen the right to move freely, visit, live, work and retire in any member state without restriction. It applies to all EU/EEA citizens, regardless of nationality and does away with discrimination in the common market. Furthermore, it ensures that certain rights can also be extended to the family members of the worker, including benefits, pensions, etc.

None of us believes that we should be disadvantaged in the labour market because of our religion, skin colour or other factors. This freedom means that discrimination on the basis of nationality, residence and/or language is not permitted, while also securing equal treatment in employment conditions, remuneration, dismissal and the receipt of social benefits.

If you believe in transparency and fair treatment, there is absolutely nothing that anyone should fear from the freedom of movement of people. On the contrary, this is an achievement that Europeans should be proud of.

The pros and cons: movement of the people

At the most basic level, the freedom of movement of people means that you and I have access to 32 EEA countries, as well as Switzerland, at the drop of a hat. Not only that, we have automatically the same rights (and responsibilities) as the citizens of those countries. What does this mean in practice?

  • You can visit all 31 countries when you like and as often as you like without cost, delay, restriction, etc.;
  • You can study / au pair, etc. in any of these countries using the same procedures and incurring the same costs as the national citizens of that country;
  • You can work in all countries without constraints or fear of discrimination due to nationality, residence, language, etc.;
  • You do not need a visa or a qualifying period before you can start working or your family can join you;
  • You can do not need to fear being treated differently in the form of the contract, holidays, wages, pension, benefits, etc. just because your nationality is different;
  • You can retire wherever you choose and transfer your pension without fear of being penalised or restricted by virtue of choosing to live in another EU/EEA country.

These fundamental rights are just the tip of the iceberg. Yet this degree of freedom to take greater control of your own destiny would have been considered to be a utopian dream not so long ago in Europe. It used to take hours to cross borders and the long, costly and uncertain bureaucratic nightmares involved in moving countries, getting a job, buying a property, establishing a company, etc. made it a remote dream, except for a small minority. No longer; this particular freedom have been hard won and it is worth fighting tooth and nail to retain.

The above are not the only benefits of the freedom of movement of people. It can play an important role in other respects, contributing to individual, national and EU well-being:

  • Ageing Population and pensions: the ageing population structure in the EU is a major challenge: of the 28 countries of the EU, only Ireland, France and the UK are remotely close to being able to replace their population. Politicians may seek to increase the female participation rate in the labour market and raise the pensionable age, however, the serious demographic challenge cannot be overcome without significant positive net migration for a sustained period of time, even beyond the levels currently being experienced due to the refugee crisis;
  • Reducing unemployment: some cities and regions of EU countries experience much higher levels of unemployment than others (e.g. London vs Liverpool). In the same vein, some countries experience higher levels of unemployment than others (e.g. Greece and Portugal vs Germany and the UK). If economies are growing and labour is attracted to more dynamic cities, regions or countries, this is advantageous to all concerned, not least the unemployed, their dependants, the employers, as well as the tax man;
  • Economic contribution: if economic growth is restricted due to lack of employees or absence of certain types of skill, a labour market of 500+ million makes it possible for economies to continue growing without overheating and resulting in recession. This applies not only to the top, professional jobs. Low paid, dirty, dangerous, dull, flexible and insecure work is the very type that many nationals of the wealthier EU countries are very content to leave to others.

There are few things in life that only entail benefits and no costs; freedom of movement of people is no different. The main potential disadvantages include the following:

  • Cheap Labour Depressing Wages: it is possible that inflows of people willing to take even lower pay than the going rate for certain jobs depresses the wage levels. However, the case either way (depressing or increasing wages) is hotly disputed by economists. Most studies find that there is almost no effect either way but many people remain fearful of this issue, especially the less educated/skilled;
  • Already High Unemployment Levels: it is possible that migrants will flow to areas with already high levels of unemployment. However, migratory flows have an internal logic – migrants want to find work, not to move from being unemployed in one location to being unemployed in yet another. As a rule, they seek out high employment areas because they want to work, they want to save and they want a shot at a better life for themselves;
  • Welfare Tourism: it is possible that a proportion of migrants will seek to improve their lives by migrating to a country offering higher social benefits in than in their own nation. However, research suggests that a tiny proportion of EU migrants fall into this category (less than 1% of all beneficiaries in six EU countries and 1%-5% in five others). Despite the great song and dance about this issue by the populists, no government has come up with any data corroborating the overblown claims of cross-border welfare tourism;
  • Brain drain: freedom of movement of people can lead to skilled people leaving countries that paid for their education and training to be benefit of the receiving country. This is certainly an issue for the emitting country. But there is also the prospect that many choose return to their country of origin, bringing with them higher levels of human capital, know-how, investment capital and an entrepreneurial mind-set that can contribute to national development.

While recognising the pros and cons involved, on balance, most conclude that the freedom of movement of people is a great boon for the individuals concerned, as well as for the emitting and receiving countries. Migration across localities, cities, regions and countries has the capacity to unleash economic development and raise living standards, while also delivering greater satisfaction and happiness at the individual level. It is not a one-way street, but it is worth defending.

The Reality: movement indirectly hampered

The reality however is that governments, to varying degrees, are sensitive to the issue of freedom of movement of people. While recognising the great potential and actual advantages of migration, politicians are extremely mindful of emotive public opinion. They are fully aware of the demographic ticking-bomb that is the ageing European society. But short-termism is inherent their profession (4-5 year election cycles) and populism (winning the next local / regional / national / European region election) is the name of their game. They and the media feed upon people´s concerns and fears, regardless of whether these are well-founded or not. Fear, not hope, is their basic working material.

The consequence is that none of the EU and EEA governments (the European Commission included) make it easy for people to get access to the information that they need to have a sound basis for deciding whether to move to another country or not. A lot of information is available, but it is fragmented, outdated, uncoordinated, etc. Moving to another country may be something that we consider but we usually do not get far. It takes weeks of research effort to connect up the fragmented dots and build a clear picture of what is involved in moving from one country to another with the EU. We typically lack the time, skills, energy and patience to do this.

Relatively few people make use of the single most precious gift of the EU to its 508 million citizens: only 11 million EU citizens have taken advantage of the right to live, study, work or retire in another EU country (or 2.2% of all people in 28 countries). It is clear that some countries are more attractive than others, but the low level of general migration within the EU is not something to fear and deny.

Moving people: MoveMapper™ app

Through the EU’s freedom of movement of people, we have almost utopian rights to live our lives how and where we want. If we choose to, we can change our minds and go back home and pick-up where we left off. I am a serial migrant. I have lived in several EU countries and worked in almost 40 countries worldwide. I have benefited enormously as a human being and as a professional. I do not fear migration or migrants. On the contrary, I embrace other cultures, languages, traditions, history, art, ideas, cuisine, and yes, also our differences and our sameness as human beings, whatever our skin colour, language or beliefs.

The beauty of the freedom of movement of people has inspired me to develop the MoveMapper™ app, which is designed to bring to together key information in deciding whether to work / study / au pair / retire, etc. in another EU country, starting with Britain and Germany.

The MoveMapper™ app covers the formalities of moving to another country, how to get accommodation, how to find employment, how to deal with financial issues, how to integrate your family, how to gain education / language skills and other issues. By pulling the relevant information together, the app provides you with the capacity to enrich your life.

I do not claim that this is a perfect app, that it has all the possible information or indeed that it is 100% up-to-date. The situation is constantly evolving and maintaining information is not easy.

But I believe that it will provide you with sufficient information with which to enable you to decide whether and how to take advantage of the EU’s greatest gift to its citizens. The rest is up to you.

The MoveMapper™ app offers information for two countries to start with: Britain and Germany, the countries closest to my heart and which form the focus of my blog: the AngloDeutsch Blog.

The free version can be tested for free. The premium version costs Euro 0,99 + VAT per country.

When the MoveMapper™ app generates sufficient interest and revenue, I plan to add other countries and update and improve the information available, as well as the app experience.

Test MoveMapper™. Rate it. Share it by forwarding it to people who might be interested.

Do not fear the freedom of movement of people within the EU; instead, recognise it for the incredible opportunity that it offers to those that choose to make use of it. This amounts to real power, real freedom to shape our lives and those of our families.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


To Brexit or not to Brexit: key issues for the EU Referendum

EU Referendum ahead

The British voter will soon be asked to decide on whether Britain will continue to have a future as part of the European Union (EU) or to exit it (i.e. Brexit or British Exist). The EU referendum’s date has not yet been fixed and must happen by 2017, but is widely speculated that it is going to be to be scheduled for mid-2016.

That question that will be put to the British voter is simple but fundamentally important, namely:

  • Should the United Kingdom remain a member of the European Union or leave the EU?

The options are either to:

  • Remain a member of the European Union or
  • Leave the European Union

This is a simple question with simple options, but it nevertheless is a historic referendum that will influence the future of the UK (and that of the EU itself) for generations to come.

Brexit the obvious solution?

I am a British citizen who lived, studied and worked in Britain. My parents, sibling and my closest friends remain in Britain. Nevertheless, during the last 20 years, I have lived and worked in numerous countries of the EU and elsewhere. I am married to a German and my business takes me regularly to different parts of the EU, potential future EU countries and beyond. I understand what the feeling is about the EU and that there is frustration with the way the EU is perceived to be interfering with British sovereignty and especially about the freedom of movement of people, which is widely seen to be adding to the social pressures in the country.

If I were about to cast a vote at the forthcoming EU referendum, I would feel apprehensive about it. If I were to believe what a hostile media and populist politicians stress, my gut reaction might be to vote for Brexit and leave the EU. I might not be greatly enamoured by the current state of the UK economy, the ongoing austerity, the decreasing wages and the job insecurity. I might well be hearing about the number of laws and regulations emanating from “Brussels”, which the shorthand for the EU, with the implication that Britain no longer controls its own borders and sovereignty. I might well be tempted to conclude that the EU is indeed to blame.

Furthermore, I might also be frustrated by my inability to get on to the first rang of the housing ladder while others point to migrants from the EU are taking up the supply of housing that I or my children want to make use of in our own country. This might lead me to concur with those that point to the “uncontrolled” borders and the EU migration caused by the freedom of movement of people. A similar argument is applied to the pressures in the health and education systems, and I might also be concerned about the “swarms” of EU migrants taking-up scarce resources that we are entitled to, since we are the ones who are actually paying the taxes while the others jump the queue and coin the market for social benefits.

In short, if I were to believe all of the above, I might be well disposed to giving “Europe” a bloody nose, just as populist politicians and the media are urging me to. I might vote to leave the EU: Britain was great on its own and can be once again.

The real issues

But the British voters are fair and reasonable. Rather than follow their gut reaction, they will want to balance both sides of the equation and be fair and dispassionate in making this historic decision. They will want answers to the following questions:

  • Is the negative portrayal of the EU and all the criticism connected with it correct?
  • Is it too simplistic to say that the EU is to blame for all the challenges in Britain?
  • Is Britain indeed so tied-up by the EU that it is no longer in charge of its own destiny?
  • Are there only costs to being one of 28 member of the EU?

If something sounds too simple to be true (it’s the EU, stupid!), then perhaps it is really is too good to be true. Simple solutions to complex problems are appealing but can the EU really be the fount of all of Britain’s ills and will the country really be better off immediately upon Brexit?

Looking at it through another lens, the fair-minded British voter might ask whether it is reasonable or not to only see “Europe”, “Brussels” and the “European Union” only in a negative light? Can it really be that Britain is only paying in but getting nought out of the EU? And, if things are not quite so black and white, what exactly are those positives that are so rare to hear about? Are the benefits so abstract that the ordinary voter simply cannot grasp them or related to them?

We all instinctively know that there are two sides to every story but the media and the loudest politicians do not excel at presenting the pros and cons. As a Brit with a foot on both camps, I hear a series of populist myths being peddled again and again. I often smell a red herring when I turn a newspaper pager. I often see the EU being used and abused by those who would attack a straw man.

So in making-up my mind about how to vote at the historic EU referendum, as a Brit, I would want to understand the costs as well as the benefits connected with the most important EU issues, namely:

EU costs
  • Is EU migration a good reason for Brexit?
  • Is EU benefit tourism a good reason for Brexit?
  • Is the housing crisis a good reason for Brexit?
  • Is EU health tourism a good reason for Brexit?
  • Are EU directives and regulations a good reason for Brexit?
  • Is the state of the education system a good reason for Brexit?
  • Is the EU the cause of austerity, low productivity and stagnating wages in the UK?
  • Is the UK paying more than its fair share and getting little out of the EU?
EU benefits
  • Is having the Euro (one currency in 19 countries out of 28) so bad?
  • Is being able to visit, study and work in 28 countries so bad?
  • Is being able to own a second home and retire in 28 countries so bad?
  • Is having common trade arrangements in 28 countries so bad?
  • Is having common environmental standards in 28 countries so bad?
  • Is having common consumer protection in 28 countries so bad?
  • Is reducing the time, stress, cost, etc. across 28 countries so bad?
  • Is the EU undemocratic, out of touch and beyond reform?
Key issues

 

  • Is Britain better or worse off within the EU?
  • Is the EU better or worse off with Britain in the EU?
  • Are you better off with Britain in the EU or not?

Questions and Answers

If I were the average voter, I would want an answer to these questions before casting my vote.

I would also want the answers to be simple, short and to the point but backed-up by evidence.

This is exactly what the AngloDeutsch Blog will seek to do from until the referendum.

This will be a challenge, given my professional and other commitments, but I shall do my best to cover as many of these topics as I can over the next few months, starting with the EU’s freedom of movement of people.

Dr Ricardo Pinto, AngloDeutsch™ Blog, www.AngloDeutsch.EU, 13 February 2016


The refugee backlash – pulling-up the European drawbridge

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU

2015 was another tumultuous year for Europe. Over a million refugees found their way into the European Union (EU), but already a new dynamic is evident in early 2016: the refugee backlash has begun and Europe is pulling-up the drawbridge on refugees and economic migrants. The broad contours of the dynamic evident can be summarised as follows:

  • The EU countries have accepted too many and cannot continue to absorb refugees at the same rate;
  • Germany was irresponsible in allowing so many refugees;
  • Without proper checks, the refugee will include a radical element that will pose a threat to the EU´s security, as illustrated by the terrifying Paris bombings in November 2015;
  • Once in Germany, or wherever, they will spread to other parts of the EU, so the freedom of movement of people principle may need to be looked at again;
  • Further sexual assaults on women and robberies by young men from “the African or North African region” are to be expected following the shameful New Year’s Eve experiences in Cologne, Hamburg and other cities;
  • The current levels of migration will destroy Europe as we know it; the borders must close, only legitimate applications up to a predetermined cap can be accepted and the rest sent back.

This all seems logical and it plays well as a populist theme. This certainly applies to parties such as the Alternative für Deutschland (AfD) in Germany and the UK Independence Party (UKIP), but it also goes down equally well with the mainstream political parties such as the Conservative Party in the UK and the CDU and especially CSU in Germany. This is without even mentioning the more radical right wing movements that exist throughout Europe. Not surprisingly, shrill criticism of the migration issue and the EU’s apparent inability to manage the situation is particularly evident in the UK, as it gears up for the forthcoming referendum (the exact date of which has not yet been announced) on whether to remain in the EU or not.

It is very difficult to unpack and analyse what is clearly a highly emotive theme, let alone have a sensible debate about it, which is the very reason why certain political parties are making hay with the refugee issue. Previously, their favourite theme was the Eurozone/Greece crisis, now it is migration but the overall gloom and doom narrative does not change very much.

I should stress that there are clearly legitimate public concerns throughout Europe about the migration issue, both within the EU and from outside. However, the use of scare tactics to gain political or other advantage is not something I enjoy witnessing so I aim to address a sub-set of issues, such as Germany’s alleged irresponsible behaviour, the argument that Europe simply cannot cope and the refugee backlash that is in full swing before the first month of 2016 is finished.

The blame game

I will start with Germany’s role in the European refugee crisis. There is certainly a messy situation, but did Germany act irresponsibly in 2015?

Any way you choose to cut it, Germany has played the key role in the refugee crisis. Germany accepted 1.1 million refugees in 2015, a number than could rise further on by the time the counting is official. Germany had in any case been experiencing significant flows of migrants, mainly from the EU. For the last few years this has been running at over 400,000 net migrants per year. Add this up and Germany received at least 1.5 million net migrants last year, which is an astonishing figure. Furthermore, under the German asylum law, refugees may be allowed to bring their family members, resulting in a significant and unquantifiable flow connected with 2015.

By any reasonable criteria Germany has been an incredibly good country to accept so many people. This is not just about the cost involved, which is undoubtedly significant albeit one which Germany is in a position to absorb. Being a good country is first and foremost about the willingness to recognise the human suffering cause by the migration crisis and to try to do something about it, rather than turning a blind eye to it all.

The contrast with many other EU countries could not be greater. Countries such as the UK have agreed to accept 5,000 Syrian refugees per year for the next five years. It has to be borne in mind that even this paltry number was only agreed to following a public outcry from British citizens appalled by their government’s hard heartedness, which bounced Parliament into agreeing to do more.

Germany is not alone in being a good country: about 90% of the refugees have been accepted by three countries out of 28 in the EU: Germany, Sweden and Austria. What about the response of the other 25 countries of the EU?  Following months of unedifying political squabbling, which continues to this day, the best they could come-up with was to agree to relocate 160,000 asylum seekers from Greece and Italy over the next two years: this is an average of 5,700 per country over two years, though very few of these transfers have actually occurred so far (less than 500 were achieved in 2015 and only 3 out of 10 “hot spots” have opened according to some estimates).

Is “pitiful” too strong a word to summarise the EU’s collective failure in the face of a mass humanitarian crisis? I don’t think so. It is not the first time that the EU has failed miserably to stand up to be counted and it will almost certainly not be the last. It is not as if the refugee crisis was some sudden, unexpected act of god; this is the result of steadily growing pressure and reaching its natural and inevitable conclusion. There was nothing about it that could not have been predicted by the civil servants of the European Commission or of the EU member states.

Germany’s decision to act more or less unilaterally in accepting 1.1 million refugees must be seen in the following context:

  1. This is the worst crisis since WW2: the number of forcibly displaced people, often due to wars, reached almost 60 million worldwide at the end of 2014, including over 14 million refugees. This was an increase of about 25% compared to the previous year and is mostly due civil war, violence and oppression in Syria, Eritrea, Afghanistan, Somalia, Iraq, etc. although other regions, including northern Africa and the Balkans, are also major sources of migrants (IMF, 2016 / The Refugee Surge in Europe: Economic Challenges). This is nothing short of a mass human tragedy, which Europe is neither immune to nor can afford to simply turn its back on. Globalisation entails many new developments, including the capacity of large numbers of people to move in the direction of Europe. It may take time, but sooner or later, it does reach Europe.
  2. This was not a crisis of Germany’s making: it did not chose to invade Iraq in 2003 and played little or no part in setting in chain a series of events which have destabilised parts of the Middle East, in an attempt to bring about democracy through regime change. Of all the European nations it is the UK, France and Italy (together with the USA) that bear the greatest responsibility for any resulting instability in the region. All are now conspicuous for their efforts to obfuscate causality and deny moral or other responsibility (if you break something, you should fix it) to deal with the resulting mess that they helped to set in chain.
  3. The EU failed spectacularly: the utter inability of the EU to find common ground in dealing with the huge volume of people heading towards Europe is what resulted in Germany’s more or less unilateral action. Just as in the Greek/Eurozone crises, it is proving extremely difficult for 28 countries to make decisions quickly and act in unison. This should not be in the least bit surprising. The EU is very far from being a United States of Europe; this simply reflects the fact that the nation-state is alive and well within the EU, despite exaggerated claims of its demise. Each nation retains the ability to follow its own mandate and block changes that it does not agree with. The Central European (Visegrad countries) and Western Balkans states have made their views crystal clear in respect to taking a share of the refugees, but they are not alone. Just as in the case of Greece and the Eurozone, finding a common solution to an unexpected large-scale problem is a slow, messy and costly process. In the end, to misquote slightly the famous words: Europeans Will Always Do the Right Thing — After Exhausting All the Alternatives. The 28 nation states plus the various Candidate Countries (i.e. Western Balkans including Turkey) will find an imperfect compromise and Germany will pay a disproportionate amount of the cost arising. Such is the iron rule of the EU. No other scenario is possible if 28+ nations are to continue to play broadly for the same team. How many other international agreements are you aware of that take a couple of weeks or months to resolve? Climate change agreements? International trade agreements? These things take years or decades, not weeks or months to sort out and are always and everywhere an uneasy compromise. 28+ countries finding a way to deal with the worst humanitarian crisis in 70 years takes time but in 2015, time was of the essence where people are involved, rather than just economics.

Cometh the hour, cometh the country: Germany chose not to sit on its hands but to act in alleviating the growing pressure along the Turkish-Greek-Balkan-Central European corridor.

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You are free to form your own opinion about whether Germany has acted irresponsibly or not. I personally think that not only has Germany acted incredibly responsibly, but as tax payer and resident of the country, I am proud of living in such a country. No doubt, Germany has already changed as a result and ordinary Germans are deeply unsettled about the implications, an issue which I plan to write about in the future. This is a reflection, among other issues of the fact that the scale of the problem is so great that no country can possibly solve it all on its own – not even Germany.

Europe Cannot Cope! Really?

The next issue is whether Germany and/or Europe have relevant experience and if they can absorb the numbers of refugees.

For a start, I can distinctly remember (since I was part of it) a small, poor, broken European country of 8.5 million absorbing about 1 million people from its former colonies during the mid- to late-1970s. While there are major differences with the current situation (common language, culture, religion, etc.), Portugal was not part of the EU but absorbed those numbers and did not collapse despite its politically chaotic and economically precarious post-colonial situation at the time. In fact, it thrived as a result of the influx. Don’t get me wrong: I am not suggesting that Europe should fling open its doors to all and sundry with no questions asked, but I am saying that Europe is much more robust than many would seem to believe.

After a short-lived spike of international approval for its decision to take on the refugees, Germany has since reaped criticism, direct and indirect, most of which has been leveled at Angela Merkel, the Germany Chancellor. The gist of the argument is that she has gambled Germany’s long term interests for personal hubris: she wanted to cap her career with a Nobel Peace Prize and/or improve Germany’s international image after the Greek crisis. Others of a more analytical bent sought instead to justify Germany’s actions (and presumably the inaction of their own governments) by pointing to Germany’s ageing population structure. It seems to me that almost all 28 EU countries are suffering from the same problem, albeit to varying degrees. Did others facing the same demographic situation jump to take their share of refugees? I don’t think so.

It is certainly true that Germany and many EU countries have a rapidly ageing population structure (fertility of around 1.5, which is below the replacement rate of 2.1) that would greatly benefit from significant immigration of the scale that happened during 2015. But I take issue with the implication that the German authorities naively failed to foresee the likely stresses and strains that would be generated by taking so many refugees in one year (the estimate at the time was 800,000 – 1 million refugees). The reality is that Europe generally and Germany specifically have plenty of experience of large scale refugee crises and indeed of Muslims culture.

Firstly, Germany has a large number of Muslims. According to the 2011 Population Census, there are just under 6.2 million foreigners in Germany and Turks alone accounted for the largest group (1.5 million people or 24.4%). In all, some 2.5 million people are of Turkish origin. It is not as though Germany is not aware of the stresses and strains associated with the religion, gender, education, labour market and other dimensions connected with integrating populations, including Muslims. The same applies to many countries of the EU but unlike others, it still went ahead with what is often described by its critics as its “open door” policy.

Secondly, it was not so long ago that Germany had to respond to a refugee crisis of similar proportion. During the 1990s, a large number of asylum applications were lodged due to crisis in the ex-Yugoslavia, though the peak of that crisis in 1991 (around 700,000) has been exceeded in 2015 (see first Figure below). That said the second Figure below illustrates the point that the numbers were relatively low compared to those of the 1990s, though the diagram does not take the 2015 influx of over a million refugees into consideration. It is probably not a coincidence that then, as now, Germany absorbed the lion’s share of refugees.


IMF graphic 2016

Source: IMF, 2016, p.11

Thirdly, to put things in context, Europe had only absorbed 1 out of the 14 million refuges worldwide in 2014 and this increased to 2 million in 2015. Whoever believes that what has happened in 2015 is the end of the matter and that the EU can simply put-up the fences, close the borders and turn its back on the rest of the world is deluded. A proportion of the 12 million other displaced people are heading our way in 2016 and beyond: the current estimate is that another 1 million will aim for the EU this year and possibly more. The way to end this catastrophe is not by pulling-up the drawbridge to Fortress Europe; if the conflicts in the countries in question are ended and if this is combined with a major reconstruction programme, in time, the human tragedy and the migratory process will also abate. Putting-up fences and closing borders will restrict some of the flow, but will also add to the human desperation without actually dealing with the root cause.

To conclude, in my view Germany did not saunter into the current situation blithely and Mrs Merkel was right in saying “Wir schaffen das.” We can do it: I agree with her. Other, much smaller and poorer countries have in the part or are currently absorbing the same or higher numbers of refugees. Germany knew, more or less, the implications of opening its borders to about a million refugees, even if the general public could not have predicted the exact consequences, including the outrages in Cologne and other cities. It is most unlikely that Europe’s pre-eminent politician would not have sniffed the potential political, social, religious and cultural implications of undertaking such a radical step. The numbers absorbed by Europe are relatively small by comparison with the numbers being absorbed by other countries, including Turkey. If they can do it, so can Europe. Indeed, a cursory reading of European history proves that it has coped with wave after wave of migration.

Refugee backlash

To ask if the refugee backlash is coming would be to pose the wrong question: it is already here.

The mood in Germany and the rest of Europe started turning ugly long before the Paris terrorist attacks and the mass sexual and other crimes in Cologne and other German cities during the New Year’s Eve celebrations that went wrong. Pensioners are up in arms about the way they perceive their country is changing. Parents are concerned about their children’s education as gymnasia are requisitioned as temporary accommodation and class rooms begin to take the strain of absorbing the influx of non-German speakers. House prices and rent levels are being pushed up in an overheating housing market where affordable accommodation is scarce.  Region and local authorities remain deeply concerned about practical matters in addition to shelter, such as state benefits and labour market opportunities for refugees. The issue of integration and whether it is possible to achieve or not, is “the” topic of conversation. This applies to Germany and it applies equally to other EU countries.

Angela Merkel has gone from being Europe’s pre-eminent politician and practically politically unassailable in Germany, to being under siege. Make no mistake about it; she is fighting for her political future.  Yet despite the ratcheting of pressure, even today, she is refusing to put a cap of the number of refugees that will be accepted by Germany in future (the CSU is openly advocating a cap of 200,000 per annum, which itself puts the UK’s response in the shade). There are probably two reasons for this. Firstly, German asylum law is based on individual assessments so caps would not be workable without changing the law (but we know laws can be changed at the drop of a political hat). Secondly, the huge numbers of forcibly displaced people out there (14 million and counting) are desperate and there is no end to their travails in prospect. What would you do in their shoes? Which safe harbour would you try to reach, possibly at the cost of perishing on the way? A cap would be a meaningless promise without a workable EU arrangement.

Mrs Merkel is displaying the hallmark of true leadership: political courage and acknowledging moral duties beyond her nation’s borders. That is the essence of being responsible in a European and global sense, though I recognise fully that many would much rather put national and personal interest before anything else, including in Germany.

Merkel probably expected the rest of Europe, especially the largest countries, most of which have had more than a hand in the unfolding disaster in the Middle East, to take a much greater share of the humanitarian burden. Despite the lessons of Greece, she has miscalculated in relation to most of the EU and is now in the middle of the biggest political crisis that she has ever faced. She also appears to have greatly overestimated the Greek and Turkish capacity to manage their borders.

But she is nothing if not a pragmatic leader. She has recognised that the whirlwind is not just gathering, it is already blowing. A change has already been signaled that 2016 will not be the same as 2015. The scale of the challenge means that Germany cannot shoulder the burden mostly on its own for much longer. All three of the most generous countries have introduced border visa checks (three others have also and many more are threatening to do the same). A closure of national borders has so far been resisted by the EU, but this could change. Sweden has announced that 80,000 of the 160,000 refugees it accepted will be sent back because they are economic migrants, not refugees. The EU has reinforced the message by stating that 60% of the applicants are not refugees at all but economic migrants mainly from the Balkans and North African countries such as Morocco and Tunisia. It has also threatened to suspend Greece from Schengen for systematic failures in the migrant crisis. In turn Greece is pointing its finger at Turkey for allowing migrants to “swamp” their border and islands.  Reports are piling up that in addition to anti-refugee demonstrations and hostels being set on fire in Germany, violence is erupting in Sweden and other countries.

A common EU approach is the only way forward, combined with a serious and concerted effort to end the conflicts and reconstruct economies, since these are the drivers of mass population displacement. But just like the Greek and Eurozone crises, which are also far from over, it will not happen miraculously or overnight.

So, get ready for a much more hard-nosed European approach to the refugee crisis, with an emphasis on only accepting people from conflict zones (true refugees and asylum seekers) and rejecting all others (i.e. economic migrants). The EU drawbridge is being pulled-up. The wider societal backlash is already underway and those that are leading it will not be pausing to distinguish those that deserve to be helped from those that do not.


German Flags are Fluttering in Britain – Kloppmania in Liverpool

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

It’s not that common to see a Union Jack flag fluttering on British soil, except where the royal family is concerned. Seeing a European Union (EU) flag is as rare as spotting a dodo. But a seeing a German flag on British soil is something that I never thought I would witness, but that is exactly what happened yesterday. So what is the cause of this unexpected event? Is it the Brits getting the German reunification celebrations wrong by a few weeks? Is it perhaps celebrating the fact that Germany is doing them a favour by giving refuge to probably over 1 million refugees and asylum seekers to Britain’s 20,000 spread over five years? No, it is “Kloppmania”. Let me explain.

October 17, 2015 AFP PHOTO IAN KINGTON

October 17, 2015 AFP PHOTO IAN KINGTON

 

 

 

 

 

 

 

 

 

I have been a fan of Liverpool Football Club (LFC) since I first came to England in 1977. That was the year that Kevin Keegan left Liverpool for Hamburg SV, sparking off the German club’s revival and winning the Bundesliga in the 1978–79 season for the first time in nineteen years. But it was also the year when he was replaced by an even better player, namely Kenny Dalglish or simply King Kenny, as he is affectionately known at the club. They played glorious football, resulting in LFC retaining the European Cup and winning the European Super Cup (by beating a HSV team including Keegan). Domestically, they were runners-up in the league (to Nottingham Forest) and the Football League Cup. The team went on be the dominant team in England and in Europe, winning 5 of the titles in 1970s and six in the 1980s, as well as collecting 4 European Cups (now Champion’s League) along the way. However, the last league title was in the 1989-90 season, prior to the establishment of the Premier League. All good things come to an end and it has certainly been downhill more or less all the way since. Liverpool has not won the league titles for 25 years: a quarter of a decade!

Seven managers have come and gone in that time. Several have come close to winning the premier league (runners-up 4 times since 1989-90), most recently in the 2013-14, when the club played uninhibited, exhilarating, swashbuckling football, reminiscent of the dim and distant heyday. However, it was yet another false dawn and since the bitter disappointment of being runners-up there has been a season and a bit where all the hopes and aspirations of the fans have been crushed to the point where they could no longer recognise the team or the tactics.

Liverpool is a proud and historic city, but de-industrialisation has done it few favours. Reflecting the football, the city has experienced a period of decline. It may be one the poorest cities in the UK but it remains solidly working class the fans are as committed, vocal and passionate as ever, perhaps expressed most vividly in their support for the red half of the city (the other team, Everton, is the blue part) when they sing “You’ll never Walk Alone” (YNWA). They understand the game and expect their players to be committed and brave on the ball and to play in the Liverpool way. Intense is the word that best describes the cauldron of football called Anfield. The lack of fighting spirit against any team, especially fierce rivals such as Manchester Unite, is the single most unforgivable thing about recent performances, reflecting poorly on both the players and manager.

Not surprisingly, there was a growing wave of discontent in the stands, including regular booing their own team (but not the manager out of respect) in the last few games, and growing criticism in the media which features a remarkably large number of  ex-Liverpool pundits. The manager had to go – after all, they can hardly fire the whole team – and this is exactly what happened over a week ago. Although not exactly unexpected, it was still a shock the fans, the majority of whom are known for their loyalty to the club through thick and thin.

From the beginning there were two managers in the running according to the media, namely Carlo Ancelotti (ex-Real Madrid among a long list of top clubs) and Jürgen Klopp (ex-Dortmund and Mainz 05). Both are highly successful A-List managers, but the truth be told, I believe I was among the vast majority of fans (over 90% in my estimate) who could quite believe that either one would be appointed for three main reasons:

  • The club is no longer among the wealthiest in the country (5th after Manchester United, Chelsea, Arsenal and Manchester City) and cannot afford so-called “world class” players, unlike its rivals;
  • The club has not been regularly in the Champion’s League since the last, brief period of glory (winner in 2005 and runner-up in 2007) unlike many other equally illustrious clubs;
  • The burden of history of last winning the league 25 years ago, combined with the sheer scale of challenge involved in clawing up the league table and regaining the long-lost lustre does not appeal to many managers.

Wrong, double wrong and I am very happy to admit it.

I was flabbergasted and yet hugely excited when it became increasingly apparent that we would get Jürgen Klopp as our next manager, with him being unveiled by the club on 16 October 2015. Klopp’s decision to choose Liverpool over any of the leading clubs in the world, has galvanised the red half of the city, though I dare say many of the blue side (Everton FC supporters) are also secretly glad if not proud that he has chosen to come to their part of the NW (as opposed to Manchester) or London.

Now leaving aside the royal family, although there is respect, Germans are not generally held in high esteem in the UK. It is not simply a matter of two wars (which should not be underestimated, even today), it is the strongly held stereotypes which hold that Germans are unexciting and lack a sense of humour. None of this applied for a second to Klopp or “Kloppo” as he is affectionately known by fans. A little bit of research reveals a few consistent facts about the man, which goes to the heart of why football fans take to him and not just in Germany:

  • He is loyal: he is a one club ex-football player (Mainz 05), has managed two clubs (Mainz 05 and Dortmund), each for 7 years. This is increasingly an endangered species in football and one that fans automatically respect, not just Liverpool fans;
  • He gets working class clubs: Mainz, Dortmund and Liverpool have three things in common; all have a working class history, passionate fans whose “anthem” is YNWA and, of course, Klopp himself. He is clearly attracted by the passion and intensity of the fans and is something they take to him like a duck to water;
  • He is larger than life: not only is he is a tall and handsome fella, he has a semi-permanent wide grin and is extremely charismatic. He has his own style and is neither afraid to express his emotions or his opinions. This is something that all fans automatically connect with – managers who sit stony faced, take reams of notes or put up umbrellas are the opposite;
  • He excites all fans: he has his own variant of tactics, most clearly expressed in the hard running (counter pressing or “gegenpressing”) but it is intense, it is emotional and it is exciting football: it is dynamic football and fans all over the world can automatically relate to it. Unlike other managers who talk incessantly about their “philosophy”, Klopp’s approach can be boiled down to this: “So that’s it, it’s very emotional, very fast, very strong, not boring, no chess. Of course tactical, but tactical with big heart. Tactical things are so important, you cannot win without tactics, but the emotion makes the difference. Life in our game, that’s important.” This in turn can be reduced to two words which cannot be mistaken by any fan, regardless of language, culture or tradition: “full throttle” or “heavy metal” football is what is promised and I for one will gladly take that;
  • He knows there is no instant success: he has clearly not selected Liverpool because of mere romanticism, though this is undoubtedly a factor. Klopp has stressed that this was the only club that he has discussed, that he has come because of the players and that it will take time to achieve success with a team such as Liverpool. He says this often with memorable throw away one-liners such as: “I’m here to put things right at Liverpool FC – but don’t think I’m Jesus.” It is not by accident that there was an instant emotional connection. Elements of the great Bill Shankly, who set the club on its path to success, are evident. The world has come to admire the achievements of Dortmund over the German football colossus that is otherwise known as Bayern München. Under Klopp, Dortmund punched above its financial weight and reaped global acclaim for its approach in developing players rather than paying top dollar for ready-made talent. In this context, it struck a chord with the fans when Klopp said that everyone at Liverpool FC had to turn from “doubters to believers.”
  • He is not purely motivated by money: he will earn up to GBP 7 million per annum after bonuses. That is double what his predecessor earned, but he is by no means the best paid in Britain and could have earned more, if that was his sole motivation. Instead, he has accepted one of the biggest challenges in word football. To revive a team (and in the process, the city) with its fading glory and deep yearning for success in a major undertaking, compared to merely fine-tuning a well-oiled elite club with matching finances. This type of challenge is not what 99% of managers out there would go for. The level of expectation connected with such a task has crushed many before him and may well do the same to him (he is well awareness of the club’s history and has likened the weight of the past to carrying it around “like a 20 kg backpack”). He has clearly made his own calculation and let his heart as well as his head rule his decision, rather than the easy option or the bank account.

So what is the outcome?

It is that quite simply, he has gripped the city in “Kloppmania”, but he has excited everyone connected with football too. It is clear that if he is successful with his methods in Liverpool, it will impact the rest of the game and may change the tactics deployed in the UK. That prospect excites all fans. If he is able to change the money game where success if closely correlated with expenditure, as he successfully did at Dortmund, then he will not only affect Liverpool, he will galvanise all other clubs (apart from Man United, Man City and Chelsea) in the Premier League. In the process, he will also give hope to fans all over the world. The reset button will be pressed and the prevailing (largely accurate) view that money buys success on the field will be less dominant and football will get a shot in the arm.

So, it is not surprising that Kloppmania has taken over Liverpool in particular, though the effect is wider in my view, with many other fans hoping that Klopp achieves successful in England. Ex-Manchester United players and pundits such as Gary Neville are already urging caution about the runaway Kloppmania in Liverpool. To some extent, leaving footballing biases to one aside, ne is right to caution us. The first game yesterday showed that Klopp is no magician and certainly no Messiah. After 2 days of training his full squad and having to contend with a long injury list along his leading players, Liverpool played its first game against a team on top form and salvaged a draw against Tottenham Hotspurs. No win, but this team ran more, pressed more intensely, played more freely and defended much better than in three years; there are no complaints from Liverpool fans. We know we are back on the tight track. We feel that Klopp has the knowledge, experience and charisma to make our team better, more exciting and more successful. It is only a matter of time, which of course, is the very commodity which is increasingly disappearing from football.

We may have to wait a lot longer than 25 years to win the Premier League again, but at least we are free to dream once again. So pull out those German flags, wave them proudly and “Walk on, with hope in your heart.”


I found refuge in the EU. You helped me. Now, let’s help the others.

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

The Grexit crisis has blown hot and cold many times in recent years and will continue to do so for the foreseeable future. However, by common agreement, there is now an even greater crisis affecting the European Union (EU) and its future, namely the current refugee and asylum seeker crisis. It is not about economic migration; it is a humanitarian crisis.

A Refugee Crisis of Mega Proportions

I have been commenting on the issue of migration on the AngloDeutsch.EU Blog so I cannot but discuss this crisis of mega proportions. I would like to briefly summarize the points of the current situation before presenting a personal perspective below:

  • There is a variety of different types of migrants. The two main categories are “asylum seekers / refugees” who are fleeing something which makes them fear for their lives/safety and “economic migrants” who are seeking a better life for themselves and their families;
  • The difference is fundamental. Each EU member state makes its own decisions in relation to the issue of asylum seekers/refugees within the framework of broad international agreements which appear to be difficult or impossible to enforce. The same applies to economic migrants from outside the EU. Within the EU, a fundamental principle is that of “freedom of movement” of capital, goods, services and people. Consequently, there is no restriction of migration within the EU, except for recently joining countries, such as Croatia. Restrictions remain during a „transition“ period for some countries such as the UK, but other, such as Germany, have chosen to abolish such restrictions even before the transition period lapses;
  • Many politicians and some mainstream media, especially those with an ax to grind, deliberately or otherwise, lump the refugees/asylum seekers, economic migrants and freedom of movement into one giant, emotive issue: this is spurious, confusing and contributes to a heated debate in the EU and elsewhere. In an atmosphere of anxiety about migration in general, this is not helpful;
  • Most EU citizens, British and Germans included, make a clear distinction between economic migrants (there is concern about the level of migration in some countries) and genuine refugees / asylum seekers, where there is generally a good deal of sympathy;
  • The current levels of refugees / asylum seekers must be put into context: it is the highest level since World War II and is the direct result of various conflicts in Africa and the Middle East, not least in Syria, Afghanistan, Eritrea, Iraq, Somalia, etc. This is first and foremost a humanitarian crisis. For the first time since World War II, there are more than 50 million refugees, asylum-seekers and internally displaced people worldwide;
  • Some of the people joining this wave of desperate humanity are taking advantage of the situation. Having worked in Albania, Kosovo, Serbia, etc., all of which are making strides to join the EU, there is little doubt that the vast majority of these applicants are being opportunistic. If this sort of thing is allowed to continue, it may discredit the overall refugees/asylum situation and undermine the willingness to help others;
  • The latest development, since this blog focuses mainly on Britain and Germany, is that the German government has issued what is nothing less than an unprecedented commitment of take in at least 800,000 and possibly a million refugees/asylum seekers this year, not counting other forms of migration, which has been running at very high levels in recent years. By contrast Britain has taken 5,000 Syrians since 2011 and there is a major political debate about whether a target of 10,000 refugees / asylum seekers would be acceptable. The British government, under increasing pressure from ordinary citizens, has just announced that it will accept 20,000 refugees/asylum seekers over five-years (4,000 per year);
  • The main political explanations for this imbalance is that one (Germany) has a shrinking population and therefore needs to take in people but that the other (UK) is an overcrowded island that cannot absorb any more than are already coming in. There is a prominent political view that taking in refugees would not solve the problems in the relevant countries and would simply encourage even larger numbers to come to the EU;

It is up to each person to reflect on whether their respective governments’ policies are appropriate in the face of this human catastrophe, bearing in mind the costs involved as well as the potential knock-on effects on social, health, housing and other services, including the downstream integration issues. There will certainly be implications in the short-, medium- and long-term, since most refugees/asylum seekers that are accepted are likely to remain, even when the crisis is over.

A personal perspective

In the rest of this post, for a change, I shall not focus on the definitions, statistics and policy responses, etc. but the human element using my own migration experiences and those of my family. The point has been reached in this humanitarian crisis where everyone must pin their colours to the mast.

I was born in Mozambique. When I was nine years old, the civil war that quickly followed the war of independence reached stage where by parents finally decided that they had no choice but to abandon the country. There were a series of issues leading to this decision, but the straw that broke the camel´s back was a bomb that blew out the windows in the surrounding buildings. Fear for our safety, combined with a sense of growing injustice, led to a decision to leave everything behind, except for our lives and the clothes on our back. This is the “refugee / asylum seeker drive“ and it is this which is at the bottom of the crisis we are witnessing.

By the time I was 11, my parents had decided that living in Portugal was not for them and that they preferred to leave for the UK, where they felt they could rebuild their lives and offer their children better prospects. This is the „economic migration“ drive, which I shall leave for another day. My family and I have experience of both the “push” drive to get out of a country, as well as the “pull” element of a prosperous country like the UK (Portugal was not a EU member in 1977). As such, I can sympathize with the stream of people heading towards the EU.

Each of these families seeking the safety of Europe will have their own catalyst, but they are generally similar: fear of safety/life/well-being reaches a point where the extremely high barriers to leaving are overcome. Those barriers include family and friends (you leave the people you grew up with behind, probably for ever), possessions (home, furniture, mementos of life, etc.) and communities, traditions and all the other things that make-up everyday life. Only the bare minimum can be taken: people, clothes, food and money.

The decision amounts to rolling the dice that will determine their fate. They know that they may be turned back at any of numerous borders. They are only too aware that they will experience all sorts of privations. They come to terms the stark fact they or members of their family may perish on the way. Yet they are determined to head for Europe and more specifically the EU. Most will do what they are allowed to do, not least where women and children are involved. Some, especially single young men, may do whatever it takes to reach their goal, as the scenes in and around the Channel Tunnel prove.

But even if their drive, courage and determination (for that is exactly what is involved) is rewarded with success and they end-up in the EU and preferably in countries with the resources to successfully absorb them, they also know that it may all be in vain. After all, there is a high chance of being put on an aeroplane and sent home sooner or later, once the crisis is over.

And still they roll the dice, often taking their young children on this incredibly arduous and sometimes lethal journey. Imagine this, if you will, and reflect on what it would take for you to reach such momentous life and death decisions. I ask you:

  • Would you take these sorts of decisions without a very good reason?
  • Are the people who manage to reach Europe´s shores worthy of sanctuary?
  • And if so, are such people likely to have the drive to integrate and thrive in the EU?

Follow your instinct. Form your own opinion.

I am not just a migrant to the EU, I am a serial migrant within the EU. This is not a source of shame. On the contrary, it is a source of great pride which has given meaning to my life. Every country I have lived in had enriched me and, for my part, I have contributed to every country I have had the good fortune to experience. Migration has been and remains a constant feature of humanity.

There may be some seeking to reach the borders of the EU purely for economic reasons, rather than being driven by misfortune not of their own making. It is not so easy to separate out the genuine cases from the bogus ones. But the sheer scale of the crisis, the types of people involved and the risks that they are taking demonstrate that these are, in the main, fellow human beings in desperate need of our help. For them the EU is a beacon for all the things that we take for granted. There can and there will be a win-win situation for them and for the countries taking them in. Europe has absorbed countless waves of immigration in the past and benefited from them; it will continue to do so in the future.

Let us be humane and thereby reaffirm the fundamental values that EU countries are right to be proud of. You helped me. Now, let’s help the others.


#ThisIsaCoup´s Germany Bashing is “Over the Top”

Quite a few people have taken to twitter under hashtag #ThisIsACoup to air their view that Greece has been bullied and coerced into an unjust and undemocratic agreement by the other Eurozone members, with the finger being pointing directly at Germany.

#ThisIsNOTaCoup

At least part of the reason for the popularity of hashtag #ThisIsACoup is that prominent commentators such as Paul Krugman, the Nobel-winning economist, have helped to legitimise it and propel the hashtag #ThisIsACoup to the global audience. Krugman wrote in his New York Times blog“The trending hashtag #ThisIsACoup is exactly right.” This was part of his campaign to encourage Greece to exit the Euro.

 I have shown that hashtag #ThisIsACoup is exactly wrong and on two counts. Firstly, “this is a coup” literally implies a great compliment to the Eurozone countries (a coup), which Krugman and the rest presumably did not mean. What they actually meant is hashtag #ThisIsACoupD’état. But here too they have got it completely wrong because the bailout agreement on offer has none of the defining characteristics of a coup d’état either.

I am not arguing that the Euro summit agreement is all fine and well. It most certainly is not and makes unrealistic demands of Greece given the almost non-existing willingness or capacity to reform. I am simply saying that referring to it as a coup d’état (or indeed comparing the agreement terms to the Versailles Treaty, which some commentators have taken to doing) is emotional claptrap directed at one country rather than the 19 that signed the agreement, Greece included.

 #ButItCertainlyISGermanyBashing

In this post I would like address the content being posted on hashtag #ThisIsACoup. This particular bandwagon is not only ill-informed but it is deteriorating into a full-on Germany bashing movement.

Have a look at a selection of photos on offer to get the general gist of what is going on.

Germany Bashing 1

This is a sub-set of the kinds of images being posted. Some of them are funny but the vast majority are simply misleading or spiteful. The tweets are laced with references to Nazism, Fourth Reich and other stuffpointing towards Germany´s true intentions, namely of subjugating Europe through the back door.

Which planet have these people been living on since 1945?

Germans are entitled to feel offended by what is going on. Make no mistake: this is not restricted to the Twittersphere. A reading of comments posted in many national newspaper articles relating to the Eurozone crisis reveals a rising level of enmity towards Germany and its supposedly true intentions towards Europe via the mechanism of the Euro.

As a Briton living and working in Germany, with a German family, friends, family and colleagues, I find this sort of thing, often under the guise of “humour”, unacceptable.

This is unfair. It is wrong. This is  Germany bashing.

If it has not yet been understood those in question, please reflect on the unequivocal fact that that vast majority of Germans would never have opted for the Euro if they had been given a choice and would gladly return to their beloved Deutschmark tomorrow if they could. The Greek tragicomedy is only adding fuel to this particular fire. But I guess whatever I say will never not cut much ice with some people.

Debt relief has already happened and will continue to happen

Now, having got that off my chest, I would like to turn to the rest of Paul Krugman´s quotation, since it appears to legitimise much of what is going on in hashtag #ThisIsACoup namely: “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.”

I would like to start with the end bit: no hope of relief. It must be noted that Krugman wrote this before the finalisation of the bailout negotiations, so he was not aware of the fact that, for the first time publicly, “hope of relief” has been finessed into the agreement (“… including financing needs, debt sustainability and possible bridge financing.”). We all know there is no such thing as money for nothing; and so do the Greeks. Incidentally, Krugman also fails to acknowledge that there has already been very significant debt reduction in the first two bailouts for Greece. There will almost certainly be further debt reductions in the third bailout.

As for the final part of the quotation, “This goes beyond harsh into pure vindictiveness,” I suggest that the Nobel laureate actually looks are the terms of the bailout to justify his view. I do not see it, thought I do agree that many of the things in the Euro summit agreement will never be realised, just as they were barely realised in the first two bailouts and/or were reversed once Syriza assumed power.

Germany Bashing 2National sovereignty is a 19-way street

The “complete destruction of national sovereignty” part is a red herring. In a representative democracy, the Greeks elect their government and their government makes decisions in relation to spending, taxation, etc. Parliament does not have to agree to anything it does not wish to do. In the meantime, the Greek Parliament has voted to accept the draft agreement. Two general elections and multiple Parliamentary votes later, the Greek government continues to ratify bailout conditionality. The debate about national sovereignty cannot be about Greece and Greece only. In the Eurozone there are another 18 nations whose taxes are increased and/or expenditure is potentially curtailed as a result of bailout after bailout to help Greece get its own house in order. There is a duty and responsibility towards the sovereignty of 19 nations, not only one.

If a country runs out of money through its own actions and inactions and needs to get it from another 18 countries with no end in sight, then then that country can expect reforms. But remember, these are the things which everyone agrees (including the Greeks themselves) it has systematically avoided doing for decades. Ask other states that have gone broke (but do not have the benefit of a Eurozone sugar daddy) whether they have had to implement painful reforms or not and for how long they have had to do it for in order to get back to normalcy.

Greece is under tremendous pressure to accept the bailout and some of the conditionality is questionable, such as connected with the privatisation fund. This reflects the lack of progress made in the other two bailouts as well as the breakdown in trust as a result of the negotiation tactics deployed in the last six months, rather than pure vindictiveness. At the end of the day, Tsipras and the Greek government must decide what, on balance makes most sense for their country. If the conditionality is vindictive and humiliating, there is an obvious option for them. If the future is truly brighter outside the Euro then it is the duty and responsibility of the Greek Parliament to go in the direction advocated by Krugman and others. But this is something which they have steadfastly refused to do so far to many economists´ dismay and disbelief.

As an aside, Paul Krugman is reported to have said that in pushing for a Greek exit he may have “overestimated the competence of the Greek government” and that it didn’t even occur to him that Greece would make a stand against the rest of the Eurozone countries without having made a plan for an exit from the euro if things went wrong. Perhaps he will also come to agree that the latest bailout agreement may be better than the alternative after all.

He who pays the piper calls the tune

At the end of the day, the country which makes by far the biggest contribution to the bailouts and thus potentially incurs by far the greatest loss associated with the Greek bailouts is entitled to not just a vote but to a significant say in the matter. Failure to do so would be irresponsible in relation to its own tax payers and a failure in democracy vis-a-vis its own electorate.

Every country must look after its own national interests. Consider Britain steadfastly refusing to contribute a penny to the Euro bailouts but offering to show solidarity towards Greece in the form of “humanitarian and medical aid,” should the country choose to exit the Euro and default. Britain is doing what it considers acceptable to its own electorate, as are all 19 Eurozone countries. What about Greece? Its approach is the epitome of following its own national interests. Why not Germany?

Get real: Greece´s sovereignty is not the only one in question; 19 countries are affected by the crisis. As the biggest contributor, Germany is entitled to a significant voice in the decision making-process (just as Italy, France, etc. and the Troika/Institutions are – but Britain is not). Some may not like it, but that is the reality.

Grow up: WWII ended 70 years ago; there comes a point when it is just plain silly to keep rolling out the tired old war clichés.

Stop the “over the top” (pun intended) Germany bashing.